Saturday August 11, 2018
The administrator of an east-end mosque whose charitable status was yanked following a Canadian Revenue Agency audit says the organization is appealing the decision.
In a letter and other supporting documents outlining its reasons for revoking the charity status of the Ottawa Islamic Centre and Assalam Mosque, the CRA said the organization “acknowledged that it allowed its premises to be used by individuals and groups with extremist views.”
Speaking to reporters in front of the mosque just before prayers Friday, administrator Ali Abdulle said the mosque always vets speakers.
Abdulle said the mosque, which was granted charitable status in 2009, wants to be sure that it services as a bridge between Muslim and Canadian communities. “We feel this decision is not fair to who we are and what we stand for.”
The CRA documents, released to this newspaper on Thursday, said the CRA made inquiries about the organization’s activities because it was concerned about the potential for guest speakers and lecturers to “displace the public benefit by engaging in activities that promote hate and intolerance.”
The CRA had agreed to register the organization as a charity based on a pledge that it would conduct due diligence on vetting its speakers. But the auditors found there was very little to suggest any due diligence. According to the documents, auditors asked the organization to provide written transcripts or recordings of the speaking engagements, but the organization was unwilling or unable to produce them.
Abdulle told reporters there is no proof the speakers said anything in the mosque. The speakers perhaps appeared in other locations, but he could not say where.
“It might be YouTube,” he said.
The CRA documents acknowledge that some of the events in question were organized by members of the congregation and not by the mosque’s directors, but added that by allowing these individuals to make use of its facilities and to speak to an audience consisting of its parishioners, the mosque was “providing its guest speakers with a de facto endorsement.”
Between 2009 and 2013, two directors made all the decisions about the organization, including approving speaking events, according to the CRA. These directors encouraged the youth group and other groups to organize these events, and other directors were not aware of the activities until they happened, the auditors found.
Worshippers who came to attend prayers at the mosque on Friday said they were shocked by the CRA’s concerns about extremist speakers.
“What’s behind it? I don’t know,” Eddy Obedi said. “I come here every Friday. I never heard an extremist speech. Usually, the speech is about how to behave and how to connect with society.”
Ghasem Khabiri said he was concerned about the mosque’s ability to continue operations, given that donations will no longer get a charitable tax receipt. “They run by donations. It’s not a business.”
Idris Ben-Tahir, who helped shepherd the organization through the charitable status process, said the CRA’s questions about speakers has been the “hot button” issue, but there were other questions raised by the CRA that are more worrisome. In a summary of its reasons for revocation, the CRA said the organization also failed to devote all of its resources to charitable activities, provided resources to non-qualified donees, provided an undue benefit to a director and failed to maintain proper books and records. (Speaking to reporters, Abdulle said allegations about improper uses of funds are “unproven.”)
Ben-Tahir said many of those who attend prayers at the mosque and use its programs are Somalis. He’s worried that the loss of charitable status will mean the organization is no longer viable.
“I am concerned that the effect of this will be that there will be no centre of cultural activities for Somalis,” he said. “This really is a cultural centre.”
The revocation of charitable status can be a serious threat to the ongoing existence of a charity, said tax lawyer Gregory DuCharme. While losing the ability to give out tax receipts for donations can be a problem, there are a number of other things that can happen. The organization also loses its tax exemption status for the purpose of income, GST and HST and property tax.
A revocation tax can also be imposed, and it can be a serious blow to an organization.
“The revocation tax is 100 per cent of the current value of remaining assets after all debts of the organization have been paid,” said DuCharme. “For example, assume the organization has assets totaling $1 million. Assume it has $200,000 in debts. In this case, the revocation tax would be $800,000.”
Payment of the revocation tax can be avoided in two ways, he said. All assets could be transferred to an “eligible donee,” but that donee must meet a number of conditions, including that it has not had its tax-receipt privileges suspended and it has no outstanding income tax, GST or HST. As well, more than half of the directors involved in the receiving charity must be at arm’s length with the directors of the gifting charity.
An organization can also try to re-register as a charity, but it’s not a simple matter of simply paying all taxes owed, said DuCharme. “Registering can be very difficult in circumstances in which the motives of the charity are called into question.”